Blogging Bayport Alameda

March 4, 2016

Which came first: the job or the housing?

Filed under: Alameda — Lauren Do @ 6:04 am

Yet another piece on how the lack of affordable housing actually stymies economic growth and that it’s local politics is often more important than who sits in the White House.  This Samantha Bee piece sort of distills it all:

From the Atlantic:

The president cannot force richer cities to raise their minimum wages above the national minimum, nor can the executive branch alone force states to spend more money on poor neighborhoods’ public schools. But perhaps the best example is America’s housing policy. As much as tax policy or defense spending can shape the economic fortunes of families and generations, people are not just products of the District’s mandates. They are also products of local geography—which is determined city by city, and block by block. As Raj Chetty’s research has illuminated, children separated by just a few miles can expect dramatically different fortunes.

The return of record-high home prices in metros rich with new college grads is both an achievement and a warning. It’s an achievement, because there is a strong relationship between long-term growth and cities that assemble smart people. The economist Enrico Moretti estimated that every college graduate in a new industry eventually creates five more jobs.

But it’s a warning, too, because long-term growth requires that those people can afford to stay in the city. Vertiginous housing prices, which afflict San Francisco and San Jose and Manhattan and Brooklyn, are a drag on long-term productivity.

There are some good reasons why expensive cities tend to be on the water. It’s hard to builds apartments on the ocean. But restrictive housing policies—for example, height restrictions and rules prohibiting the construction of new homes or multifamily housing— are a man-made tax on agglomeration, pricing smart people out of places they want to live and the places where they could best work. This, in turn, deprives some cities of the very job multiplier that Moretti hailed. And so, cities that constrain their housing supply to maintain a certain urban aesthetic end up constraining much more—productivity, jobs, and wage growth.

Of course every city thinks that the silver bullet for their community is just to provide more space businesses and naturally the economic growth and jobs will follow, but as many studies have shown, even if those jobs are created if people cannot afford to live near those jobs the economic growth suffers because those jobs can’t be filled.  Particularly if the some of the quoted five additional jobs created by a college graduate in a new industry is of the service variety and not necessarily one that brings in over $100K per year.

The discussion is going to come up, particularly around the Alameda Marina project, about not sacrificing a thriving industry for housing that “no one can afford.”  As a whole I’m pretty apathetic to the entire project, I haven’t been paying real attention to it, but what I do take issue with is the immediate knee jerk reaction that this is some attempt to displace a needed industry with just more housing and it becomes yet another housing vs jobs fight.  The issue, from what I understand is that there are needed infrastructure fixes needed and the quickest way to raise capital for that is, you guessed it, housing.  Now, I don’t know if there is a way to fund the infrastructure improvements with existing uses, I’m sure that someone has attempted to answer this question, but it’s a shame that even when we hear story after story of displacement and people being priced out of Alameda or the region in general there is a hostility to building housing out of fear of a diminishing “quality of life.”

Now it’s not just the human aspect that is affected by lack of housing, it’s also a regional economic impact and — for some people — that’s more important than the faces and stories of displacement.

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11 Comments »

  1. Interesting Article: “Oregon’s nearly $15 minimum wage law tests tiered raises… Hourly wage increases will begin in July and continue until 2022, slowly raising Portland paychecks from $9.25 to $14.75 per hour, smaller cities to $13.50, and rural areas to $12.50. Previously, Massachusetts and California were home to the nation’s highest minimum wages. Both states implemented a $10 law on January 1, amid a three-year “Fight for $15″ debate about the rising cost of living.” http://www.csmonitor.com/USA/USA-Update/2016/0303/Oregon-s-nearly-15-minimum-wage-law-tests-tiered-raises-video

    Comment by joelsf — March 4, 2016 @ 9:38 am

  2. Alameda Marina is unique among our housing opportunity sites. It is not empty rotting warehouses and superfund sites. Of course I am for building lots of housing, and I am even okay with building housing at the Alameda Marina. That said, the core boatyard and maritime industrial functions need to survive the redevelopment largely intact.

    All of the services at Svendsen’s boatyard provide a critical support function for one of the main things that make Alameda and the SF Bay awesome. Sailing has a rightful reputation as being an activity for rich people, but sailing and other forms of recreational boating are practiced by people up and down the economic spectrum. Without the services at Alameda Marina, people like me who are renters that try and sail every chance possible for as little as possible rapidly start to lose access to the Bay Area’s greatest recreational and natural asset. It will become only for the very wealthy, just like housing. You wouldn’t allow estates to be built in Tilden Park today, and taking the Alameda Marina services away would begin to take the Bay away from the masses.

    I am hoping that the city sets up a task force or committee or whatever, and facilitates the process for whatever development application gets put together. The priorities of what the community wants to keep need to be set early so that the tradeoffs can be weighed properly and not just rely on Planning Dept. staff to guess what will make the project palatable to everyone. That would really set up the choice as an all or nothing, either or scenario.

    The public amenities for this site need to be preservation of the working waterfront aspects of the site. We don’t need this to be the place where waterfront parks and entertainment, retail, etc. become the focus of the public benefits. The NOSC is adjacent and the Bay Trail will be interrupted anyway, so that doesn’t have to be the focus other than the minimum path for BCDC. Things like RV storage (there are tons), martial arts studios, golf shops, union halls, etc. can be done somewhere else. The maritime businesses need to have a chance to survive. That might involve paying for relocation to new buildings and sites, and/or requiring “xxx” amount of square footage be maritime industrial to avoid sailmakers and metal workers from having to compete with starbucks and google for commercial/retail space. If things get a little more expensive for storing rotting boats in the parking lots and never using it, that’s okay. But The core functionality of the Boatyard, lifts, hoists, etc., need to be the focus.

    Comment by BMac — March 4, 2016 @ 10:47 am

  3. In the real estate industry we believe highest and best use should prevail. The marketplace tends to dictate what is in short supply.

    Comment by Ed Hirshberg — March 4, 2016 @ 11:50 am

  4. 3. That is what governments are for. Identifying social goods that the market might not assign proper monetary value to. Or, should the city start selling off the parks and streets too?

    Comment by BMac — March 4, 2016 @ 12:12 pm

  5. The theory of course apply to private property not public. For example the loss from zoning property for retail only is almost incalculable. City planners thought they could attract retail almost anywhere and tried to capture the sales tax. This caused areas of many cities to lie fallow when property owners could neither attract tenants nor repurpose the property. Central planning tends to be disastrous.

    Comment by Ed Hirshberg — March 4, 2016 @ 12:48 pm

  6. 5. So do you favor zoning? Any planning restrictions? Why can’t I have a liquor store next to a school? Isn’t the central planning? Aside from the hackneyed “markets rah rah rah” stuff, what is your philosophy on when collective planning works?

    Comment by BC — March 4, 2016 @ 1:04 pm

  7. Exactly, then you are arguing against zoning policies if the marketplace should always be deciding what happens on private property. You might be able to win me over w/ abolishing zoning, but if we are gonna have it, might as well get the good aspects along with the bad.

    Comment by BMac — March 4, 2016 @ 1:11 pm

  8. Zoning was eliminated in Houston and I understand that the city has flourished. But I have not had a chance to see it first hand. We do a bit of work in a commercial district in Oakland that was rezoned from commercial to retail only, and the district has struggled for decades, when it used to be really busy. Because land is limited on this planet, cities should not be zoned into disuse.

    Comment by Ed Hirshberg — March 4, 2016 @ 2:53 pm

  9. 2. I thought I was out on a limb in my previous two posts about this, but glad to see I have an ally. Brock, the now former harbor master wrote a letter which was printed in the Sun. He didn’t mention his former position with the marina but his letter made a lot of the same arguments about the value of the infrastructure.

    In terms of the high cost of sailing, I thought I should give a shout out about Alameda Community Sailing Center ( http://www.sailalameda.org/ACSC/). I was part of their first adult class in the fall. The reason I took the class was to relearn the basics. I built a 15′ boat and taught myself to sail it in the estuary in 1983, but it has been in our yard for too long. My wife’s dad has built several boats and last year gifted to us a great Herreshoff designed 18 foot full keel sloop he built with experimental hull construction. Even though it costs some serious $ per annum to berth it, I come up with that because one doesn’t look such a gift horse in the mouth. (FYI- The design is east coast and gets a lot of attention because it is distinctive. There are west coast designs which make for drier sailing in the bay, especially in peak sailing conditions, but this boat is fun.) Boats are expensive to maintain but the sailing community tends to include aome pretty cool people even if we are predominantly white. Alameda, being an island with high per capita number of boat slips, is a particularly unique place in that context. Living on a boat is also one way many people find to survive increasing rents, but revamped boat slips at Alameda Marina could easily double in cost. It has long been one of the most affordable places to stow a boat, particularly the dry storage which will be a thing of the past with the full build out of developer’s master plan.

    BMac, if you are serious about getting out to sail often, get my contact info from Lauren and I can take you out for free. It would be a great opportunity to get to swap anecdotes about local development issues.

    Comment by MI — March 4, 2016 @ 5:18 pm

  10. Costco is raising entry-level wages for its hourly workers for the first time since 2007 as the warehouse club operator fights to compete in a tighter labor market.

    The company told investors Thursday that it will pay workers $1.50 more per hour in the U.S. and Canada effective this month. Workers will now earn at least $13 or $13.50 per hour, up from a minimum of $11.50 or $12 per hour. The move will squeeze profits for the third quarter and beyond.

    The steps come as other major retailers have been increasing the minimum wages for their entry-level workers.

    Comment by joelsf — March 4, 2016 @ 6:00 pm

  11. 9. MI, what’s the displacement of your sloop? I’m a pretty big guy 😛 . I had never stepped foot on a sailboat until 2009 when I took classes from Club Nautique, got hooked and sailed A TON in the next 5 years. I switched over to Tradewinds in Richmond in 2011 because of the value and atmosphere of the organization. Did bareboat trips in BVI, Croatia and French Polynesia. Hoping to get my six-pack this year, but have sailed much less since my daughter was about 18 months (almost 4 now). You can email me @ Brian R McGuire ~at~ gmail to swap notes and schedules. Happy to splash around.

    Comment by BMac — March 5, 2016 @ 9:50 am


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